Effectiveness of price discounts and premium promotions

Although price discounts are by far the most common form of sales promotions employed by firms, the increasing use of premiums as a promotional strategy may imply that they are occupying a more important place in the promotional strategy. Since price discounts are quite costly and can reduce consumers' reference prices, undermine perception of quality, and hurt brand equity, it is crucial to know what type of promotion is the most preferred and valued by consumers. As the most recent works in the field have argued that the promotional benefit level is an important determinant of promotional effectiveness, this research reports the results of two experimental studies that investigated the interaction effect between promotional benefit level and promotion type across three levels of benefit (low, moderate, high). The results obtained suggest that at high benefit levels price discounts are more effective than premiums, while the opposite occurs at low levels. However, a similar evaluation of promotional tools was found at moderate benefit levels. The findings offer guidance to managers who might benefit from knowing what is the best strategy to promote their products and services. Our work also extends prior related research because, to this date, the effectiveness of price discounts and premiums across promotional benefit levels is an under‐researched issue. © 2009 Wiley Periodicals, Inc.     

The experience of technological collaborations by MERCOSUR companies

This paper examines some of the experiences in information and knowledge sharing involving MERCOSUR firm. It finds that while technological collaborations by MERCOSUR firms are relatively few, located in low-tech sectors and taking place in an environment of little innovation, they are motivated by the need to ‘fuse’ their own knowledge with that of partner or to improve available information. Modes of governance vary accordingly, with equity or contractual forms being used for new developments and informal agreements for improvements. Govmments and business associations can be important facilitators of technological collaborations. The analysis of technological collaborations suggested that the better prepared a corporation entered an agreement the more successful it was likely to be. It also pointed out that where interactions were intense, well intended and transparent, included personnel exchanges, were properly assessed and involved receptive participants, learning progressed smoothly and partners were satisfied. Benefits of the collaborations included new patentable and non-patentable products new factories, as well as building trust between partners. Premature termination of some collaborations was the result of financia1 limitations unrelated to the success of the collaboration.     

How do CEO emotions matter? Impact of CEO affective traits on strategic and performance conformity in the spanish banking industry

Research on how managers influence firm outcomes has generated promising explanations of differences in organizational strategies and performance within a given industry, but has largely ignored the role of emotions in shaping managers' strategic choices. This article analyzes the influence of the affective traits of CEOs—their long‐term tendency to experience positive or negative moods or emotions—on strategy and performance conformity in a sample of Spanish banks and savings banks. Our results show that managers' negative affective traits are related to more conformist strategies and more typical performance, whereas positive affective traits seem to promote outcomes that deviate from the central tendencies of the industry. Results also show that strategic conformity mediates the relationship between CEO negative affective traits and typical performance. Copyright © 2009 John Wiley & Sons, Ltd.     

Cross-cultural analysis of the global mindset and the internationalization behavior of small firms

This research analyzes the influence of a global mindset on the internationalization behavior of Norwegian and Portuguese small firms. It specifically sets out to assess the role of global orientation of the entrepreneur and firm perspectives on the global market. Based on a sample of 354 small firms, we used structural equation modeling to conduct our analysis. The results show the differing importance of a range of factors in explaining global mindset in different contexts. The global mindset of Norwegian entrepreneurs conditions their behavior and international experience, while for Portuguese entrepreneurs it affects the cognitive domain and their technical expertise. Global mindset and global orientation have more relevant effects on the internationalization behavior of Norwegian firms than that of Portuguese firms.     

Does Family and Lone Founder Involvement Lead to Similar Indebtedness?

This study evaluates whether the presence of a lone founder and family involvement impact private firms’ leverage differently from a methodological view. Using a sample of 4,102 private firms in Spain and taking under consideration a panel data structure from 2006 to 2013, we find that lone founder and family involvement matter in capital structure decisions and size shapes the forementioned influence. Our findings show that lone founder involvement always implies higher debt than the rest of firms and suggest that firms with genuine family involvement are significantly low debt companies.     

Geometric Asian options: valuation and calibration with stochastic volatility

The scaling properties of two alternative fractal models recently proposed to characterize the dynamics of stock market prices are compared. The former is the Multifractal Model of Asset Return (MMAR) introduced in 1997 by Mandelbrot, Calvet and Fisher in three companion papers. The latter is the multifractional Brownian motion (mBm), defined in 1995 by Péltier and Lévy Véhel as an extension of the very well-known fractional Brownian motion (fBm).

We argue that, when fitted on financial time series, the partition function as well as the scaling function of the mBm, i.e. of a generally non-multifractal process, behave as those of a genuine multifractal process. The analysis, which concerns the daily closing prices of eight major stock indexes, suggests to evaluate prudently the recent findings about the multifractal behaviour in finance and economics.     

A smooth coefficient model of carbon emissions

I use a semiparametric smooth coefficient model to estimate a generalization of the emissions convergence models derived from the green Solow model proposed by Brock and Taylor (J Econ Growth 15:127–153, 2010). Parametric estimates of simple homogeneous coefficient convergence models suggest that there may be heterogeneity in emissions convergence across different subsamples of observations. The semiparametric models confirm that there is heterogeneity across countries in coefficient estimates; however, such heterogeneity does not appear to be substantial enough to qualitatively influence the estimates derived from the parametric models. Hence, I find that (i) the green Solow model is a robust framework for analyzing carbon emissions convergence and (ii) carbon emissions are converging across a large sample of countries. My results suggest that international agreements that assign pollution rights based on population levels may be agreeable to many nations.     

Distribution-free tests for time series models specification

We consider a class of time series specification tests based on quadratic forms of weighted sums of residuals autocorrelations. Asymptotically distribution-free tests in the presence of estimated parameters are obtained by suitably transforming the weights, which can be optimally chosen to maximize the power function when testing in the direction of local alternatives. We discuss in detail an asymptotically optimal distribution-free alternative to the popular Box–Pierce when testing in the direction of AR or MA alternatives. The performance of the test with small samples is studied by means of a Monte Carlo experiment.     

Franchisee-based brand equity and performance

This study focuses on the perceptions of franchisees and analyzes the influence of brand equity on franchisee performance. The factors that constitute brand equity are also assessed. Factor analysis was used to generate valid and reliable scales based on a sample of 205 Portuguese franchisee firms, and structural equation modeling methodology was then employed in the analysis. The results show franchisee-based brand equity (FBBE) to be a multivariate factor with strong influence on performance. This study contributes significantly to the literature by showing the perspective of franchisees toward franchising. It also has implications on the adequacy of corporate strategy in achieving performance.     

Portfolio management with tail dependence

Many publications, that treated with Portfolio Management, were devastating for all asset allocation models in the context of portfolios. The elimination of extreme events (asymmetric or tail dependence) during the portfolio construction process can reduce the skills of asset managers to reduce risk through diversification. The copula theory allows us to calculate an alternative to measure the dependence of extreme events in assets through the index lower tail dependence. We check that the strategies with tail dependence overcame Talmud rule, the Markowitz model and the model of Tu and Zhou by simulating 1,000 portfolios with 3, 5, 10 and 20 randomly selected assets from DJIA for the period 03/1990 until 12/2016. We conclude that models of tail dependence and Markowitz had more performance ex-ante than Talmud and the Tu and Zhou model for portfolios with 3, 5, 10 and 20 assets. Tail dependence models overcome Markowitz, in terms of cumulative return, in over 60% of months considered in the analysis. The results indicate that the Talmud rule should be discarded in a context of constructing portfolios with individual stocks ahead strategies with tail dependence.